Hi everyone
I have a client who purchased a large item of machinery during the 2014-15 tax year, but did not make it common knowledge to me that he had done so until the 2015-16 tax year.
I am in the process of preparing the accounts for the 2015-16 tax year, and was wondering if anyone else is aware if AIA would be available, keeping in mind that the asset has not yet been claimed in terms of Cap Allowances by any means, nor has the purchase of the asset been enteted on the accounts until the 2015-16 tax year.
Many thanks
Replies (11)
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AIA is available for the chargeable period in which the expenditure occurred. So no, it's not available in the following year.
Why not amend the previous year?
Gently but firmly, AIA is not the issue- The client purchased a large lump of machinery, and when you balanced off bank, cash, directors' accounts you did not notice, and when you discussed the final accounts with the client you did not ask standard junior clerk questions, similar to "did you buy any equipment during the year?"
or question any variances in the P&L.
We're quick to judge, aren't we ?
What if the client's mum lent him the money to pay for this machine ?
How about we collect some facts before we comment ? Ask some standard junior clerk type questions or whatever.
We're quick to judge, aren't we ?
What if the client's mum lent him the money to pay for this machine ?
How about we collect some facts before we comment ? Ask some standard junior clerk type questions or whatever.
My sentiments precisely
I can't comment on the accounting, but for tax purposes under CAA 2001, s 3 the claim for the AIA must be made on the tax return for the year in which the expenditure is incurred (assuming all the conditions for AIA are met as mentioned by earlier respondents). Therefore you need to amend the 2014/15 return to make the claim and this must be done by the deadline for amending that return.
As mentioned by others you can still send a revised tax comp for the 2014-2015 tax year. To avoid this in future you should be asking for confirmation of any capital expenditure not posted to an asset account, including capital assets expensed.